Speaking at the National Defense University at Fort McNair in Washington, D.C., Defense Secretary Chuck Hagel called for a sweeping overhaul of the military structure. (Manuel Balce Ceneta / AP)

Defense Secretary Chuck Hagel has launched a sweeping review of the military's personnel structure, including the ratio of officers to enlisted, the balance between active and reserve components and the mix of troops to civilian support staffs.

In his first major speech since taking office in February, Hagel signaled a shift in the Pentagon's approach to this year's budget crunch and for the first time publicly outlined his priorities for the changes that are likely to occur under his watch.

Unlike his predecessor, Leon Panetta, who dismissed talk of further Pentagon budget cuts as irresponsible and exhorted Congress to prevent them, Hagel told the military's brass to brace for the prospect of long-term reductions.

“Much more hard work, difficult decisions and strategic prioritizing remains to be done,” Hagel told several hundred military officers and civilians at the National Defense University in Washington on April 3.

“We cannot simply wish or hope our way to carrying out a responsible national security strategy and its implementation. The department must understand the challenges and uncertainties, plan for the risks, and, yes, recognize the opportunities inherent in budget constraints and more efficient and effective restructuring.”

The 29-minute speech was also noteworthy for what Hagel left out. He did not talk directly about the prospect of reducing troop levels, made no specific mention of retirement reform and did not touch the politically sensitive issue of the military's soaring medical costs.

He talked only in general about need to reduce personnel costs alongside other targets for savings, including administrative “overhead” costs and weapons systems.

“Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness — the budget categories that enable the military to be and stay prepared,” Hagel said.

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Hagel suggested that the number of troops in the force is not the only personnel question on the table. “The size and shape of the force needs to be constantly re-assessed, to include the balance between active and reserve, the mix of conventional and unconventional capabilities, general purpose and special operations units, and the appropriate balance between forward stationed, rotationally deployed, and home-based forces,” Hagel said.

He noted that the officer corps has grown steadily in proportion to the military's overall size.

“Today the operational forces of the military — measured in battalions, ships, and aircraft wings — have shrunk dramatically since the Cold War era. Yet the three- and four-star command and support structures sitting atop these smaller fighting forces have stayed intact, with minor exceptions, and in some cases they are actually increasing in size and rank,” Hagel said.

Hagel suggested the national defense strategy that the Defense Department outlined in January 2012, which included a renewed focus on Asia and less emphasis on the prospect of Iraq-style stability operations, would likely remain unchanged. His plan is to look at ways to fulfill that strategy with potentially fewer resources.

Hagel signaled that the scope of the review under his watch will be broad and comprehensive and may include making fundamental changes to the 1986 Goldwater-Nichols Act, the last major defense reorganization that largely defined the shape of today's joint force.

“There will … be close scrutiny of [the Defense Department's] organizational chart and command structures, most of which date back to the early years of the Cold War,” he said.

Goldwater-Nichols, was drafted at the height of the Reagan defense buildup and focused on improving jointness and establishing clear operational chains of command. Cost and efficiency were not major considerations.

“Goldwater-Nichols succeeded in its purpose by strengthening the Joint Staff and the combatant commands, but it went about doing this by layering joint organizations and processes atop service organizations and processes. The elevation of the former did not automatically lead to the diminution of the latter,” he said.

Hagel conceded that a fundamental reorganization of the Pentagon and the way it spends money will run into resistance.

“It could turn out that making dramatic changes in each of these areas could prove unwise, untenable, or politically impossible. Yet we have no choice but to take a very close look and see how we can do all of this better.”